Recruitment in UK can be a challenge, but you don’t have to drown in time-consuming admin just to place a candidate. You can simplify complications by using an Umbrella Company (or “contractor management company”), as long as you pick the right one.

Skip ahead to find out how we can help you place candidates faster, or simply read on to find out more about the specific issues you’ll face.

Placing a new contractor in UK: what are the challenges?

Taxation

Recruiting in UK generally requires a lot of complex admin duties, and contractors might end up paying too much in taxes or failing to comply with UK tax law. It’s important to know what kind of concerns you’ll be facing.

Double taxation: Contractors can incur a tax liability in both their home country and in UK. Many countries have agreements that mitigate this type of issue, but whether or not you can take advantage of them will depend on factors like the length of the contractor’s stay, or the laws of the contractor’s home country. You can learn more about double taxation here (note: this info was written with respect to the UK, but the general concepts will still apply).

Withholding tax: If a foreign company is used to provide services overseas, the payments made to that company by the UK client could be liable for withholding tax under UK tax law. Find out more about withholding tax.

Individual taxation and tax residency: A contractor’s tax liability will often be determined by his or her residency status in their home country and in UK. Figuring out their tax residency can be difficult and is often tied to the length of their stay in UK (or out of their home country). Read more about tax residency and individual tax liability here.

Permanent establishment: Most double taxation agreements limit the scope of taxation in the host country by providing that a business is only taxable in another state if it has a permanent establishment in that state. A permanent establishment is a fixed base such as a branch, office, factory, workshop, mine or oil well. To find out how to avoid permanent establishment and unnecessary tax liability, read more about the issue.

Why use a contractor management company?

An efficient way to manage these problems is to outsource them to a contractor management company. They’ll act as the contractor’s “employer,” handling all of their invoicing, fees, and social security. As UK tax experts, they also help contractors comply with local tax law while maximising the amount they get to keep.

A quicker, better recruitment process: Working with an Umbrella Company means saving time, effort, and resources. Higher earnings and a smoother transition also make contracting a more attractive opportunity, helping you place candidates more quickly and successfully.

Still, you’ll need to find the right company for you and your candidate.

How to find the right Umbrella Company?

Making sense of the options: For free, we match contractors with Umbrella Companies and can help dramatically reduce waiting times. There are numerous Umbrella Companies in UK and each has its own specialties, services, and payment structures. Choosing the right one is crucial, but it can be difficult when you’re facing a bunch of unfamiliar options.

We’ve developed an extensive database of these companies. We can guide you through your options and help connect you with the best company for you and the contractor.

Get in touch: If you want straightforward, honest advice on recruitment in UK, we’re easy to contact. Call, e-mail, or chat with us online - for free.

Depends on the visa status of the candidate but simply put the company sponsoring the visa needs to lodge a Resident Labour Market Test for 28 days for the candidates skill set. After which they can lodge an application with the UKBA for a COS (Certificate of Sponsorship), this should take 5-7 days if the candidate is in country on a relevent permit, if not the application can only be made on the 5th of any given month. Once the COS is approved this is sent to the candidate and if they're making an out of country application they need to book an appointment with the UK Consulate in their home country to obtain entry clearance, this can take between 3 days to 3 weeks. If the candidate is in country on a relevent permit that allows switching of visa categories in country, the candidate books an appointment with a UKBA office to obtain entry clearance. Only once the candidate has Entry Clearance can they commence work.